Business Fights Back: Continental's Turnaround Pilot

Back in 1994, the customers desperately needed attention. When Reitz signed on as head of sales and marketing, the airline was a horror show. It offered cheap fares on out-of-the-way routes, but it lacked the operational efficiency to make the lowball strategy pay off. Its jets were old, its on-time record lousy. More to the point, Continental had decimated the relationships it needed to fly high. It had reduced or eliminated agency commissions on low-priced routes, and it had laid off half of its sales reps. It rarely called on corporate purchasers. It had gutted its OnePass frequent-flier program.

Continental's initial flight plan was straightforward enough. It already had begun improving operations, cutting delays and complaints. To survive, though, it had to lure more full-fare-paying business passengers. And that meant winning back favor from three groups: the travelers themselves, the employers who paid the tab, and the big agencies that booked the trips. "Bonnie had a huge rebuilding job to do," says Jack O'Neill, president of corporate travel for Maritz Travel Co., a St. Louis-based agency with offices nationwide. "Beyond being a bad airline, Continental had frozen us all out."

Reitz hired back half the number of sales managers her predecessor had let go, and she created a small force dedicated to large, corporate customers. She convinced Continental's senior executives to take ownership of important agencies and corporations in assigned territories, and to join marketing staffers on sales calls and at the twice-yearly customer confabs.

With Ayer's Quinlan, Reitz also launched a new ad strategy. Continental was, by then, posting the best on-time record in the business, and passengers were voting it the nation's best airline in annual surveys conducted by J.D. Power & Associates. The "Work hard. Fly right" campaign in 1998, which was inspired by an irreverent series of ads touting Continental's Newark, New Jersey hub, drove to the heart of what the company was becoming. This was an airline that could have fun -- but damn it, it got you home on time.

Finally, Reitz worked to make Continental's 56,000 employees think about their customers too. "That was the most difficult thing," she says. "In an operationally driven company, how do we show that being customer oriented is important? How do you turn the company inside out?"

You do it by sending employees daily news updates by email and fax, and by having regular visits from top company executives. But a turning point, Reitz says, was a party thrown at Bethune's Houston home for 100 elite-level OnePass members. News of the event, where Bethune essentially apologized for the airline's decline, roared around Continental's headquarters and hangars. "Nobody could believe the CEO would have actual customers to his home," Reitz recalls. "It sent a message. It said, We're going to do what customers want us to do."

After September 11: Starting to Fly Again

The first 48 hours after the hijackings were a blur. It was clear even at Tuesday morning's board meeting that radical changes would come -- schedule cutbacks and layoffs were discussed, as was government intervention. But there was no precedent, little concrete information, and no clear plan. "We have had some horrendously frustrating days of stops and starts," Reitz said at the time.

One immediate problem was staring Continental in the face. When the FAA ordered all planes out of the sky at 9:30 on the morning of the 11th, 91 Continental jets were forced to land at airports that were not their scheduled destinations. Flight 1917 to Vancouver landed in Green Bay, Wisconsin. Flight 14 from Honolulu to Newark stopped in Youngstown, Ohio. Planes from Europe were scattered to obscure Canadian runways.

At Continental's System Operation Coordination Center (SOCC), hundreds of workers tried to figure out how to get all those planes back to where they belonged -- and how they would restart the airline essentially from scratch whenever flights were allowed to resume. On a normal day, one off-schedule flight can disrupt dozens of other flights. So imagine the complexity of reordering an entire system, all at once, with nothing to go on. "There was nothing in the book explaining how to do this," says Mike Bleike, senior director of the SOCC.

While Bleike's crew tried to recover planes, Reitz's team did the same for stranded passengers. Sales managers called their biggest corporate clients in order to find how many of their employees were stuck in which cities. Wherever possible, it offered office space and reserved hotel rooms. Then, one by one, Continental booked passengers on the limited flights that would be allowed on Thursday.